The rules around tip pooling have been mired in litigation since 2011, when regulations came into effect that forbid tip pooling between employees who customarily receive tips and those who do not. The recently passed federal budget bill has created clarity by amending the Fair Labor Standards Act (FLSA) and eliminating that rule for employers who do not take a tip credit. Since the rule has been eliminated entirely, court decisions interpreting it—such as Oregon Restaurant and Lodging Association, et al v. the U.S. Department of Labor—are irrelevant.

The amended portion of the FLSA, while allowing for tip pooling between front and back of house employees if no tip credit is taken, clearly states that tips cannot be shared with managers or supervisors. To determine if someone is a manager or supervisor for the purpose of the tip pooling statute, employers should apply the White Collar Executive duties test below. An employee is only disallowed from sharing in tips if all of the following are true:

Their primary duty is the management of an enterprise in which the person is employed or a customarily recognized department or subdivision; and

They customarily and regularly direct the work of two or more full-time employees (or the equivalent, e.g., four 20-hour per week employees); and

They have the authority to hire, fire, or promote other employees or effectively recommend similar actions.

Given the specificity of the test, a fair number of workers who operate in a supervisory capacity on an occasional basis, or while performing their own customer service tasks, will likely still be eligible to share in tips.

Employers who do take a tip credit are still prohibited from enforcing any tip pooling system that shares tips with employees who do not customarily receive tips.

In January of 2018, significant new laws affecting cleaning services in Oregon went into effect. Property Services contractors are required to obtain a labor contractor license from the Oregon Bureau of Labor and Industries (BOLI). Initially, BOLI was also requiring all property services contractors to submit weekly certified payroll reports. As of March 12, 2018, certified payrolls report are no longer required.

To read more about which professions fall under the Property Services/Janitorial Services rule, and the link to the revised 2018 Labor Contracting in the Janitorial Services Industry handbook, click here.

The Tax Cuts and Jobs Act signed into law by the President on December 22, 2017 made changes to Qualified Transportation Fringe Benefits that effect employers and employees.

Employers can no longer deduct the expenses for providing tax-free qualified transportation fringe benefits to employees, unless the employer treats the transportation fringe benefit as taxable W-2 wages to the employee.

Employees may still pay for transportation expenses with pre-tax dollars.

A Qualified Transportation Fringe is defined as:

Transportation in a commuter highway vehicle for travel between the employee’s residence and place of business

Transit passes

Qualified parking

Qualified bicycle commuting reimbursement

For 2018, the monthly limit on the amount that may be excluded from an employee’s income for qualified parking benefits will be $260 for parking at or near an employer’s worksite, or a facility from which the employee commutes via transit, vanpool or carpool.